Democrats and Republicans Reach Debt Ceiling Deal

Social Security and Medicare recipients will not have to worry about cuts to their benefits as part of the debt ceiling deal reached between Democrats, the White House and Republicans on July 31.

In a rolling series of reports on the debt ceiling deal on Huffington Post, the White House reportedly released a list of quick facts regarding the deal:

• President Obama gets a debit limit increase of $2.1 trillion until 2013.
• The first round of cuts will come to almost $1 trillion, $350 million of which comes from the Base Defense Budget using a review of the U.S. national security policy.
• Another $1.5 trillion in cuts will come from a bipartisan committee that will look at both entitlements and tax reform, among other programs. A report is due by November 23, 2011.
• The committee's recommendations will then go to Congress, which has until December 23, 2011 to vote.
• If nothing is done with the committee's recommendations, mandatory spending cuts will kick in; half each from domestic and defense. Social Security, Medicare, and "low income" programs are exampt.

The agreement comes just two days before the deadine of Aug. 2, which, had a deal not been struck, may have caused the U.S. to default on some of its loans. Eventually, the affects would have been widespread, especially for those with investments. States, however, would have still have federal state aid for several months to support federal programs.

If the committee does nothing or if Congress does not vote on the committee's recommendations, certain steps automatically come into play; $500 billion of additional defense cuts on top of what has already been named in the initial deal as well as cuts to critical programs like infrastructure and education. Additionally, what the deal also does is give the President the power to allow the Bush-era tax cuts to expire, keeping the proposed balance of spending reductions and revenue in check.

Click here for a more detailed account on the deal as released by the White House shortly after the President's address on July 31.